International. Univar and Nexeo Solutions announced that they have entered into a definitive agreement for Univar to acquire Nexeo in a cash and stock transaction valued at approximately $2 billion, including the assumption of Nexeo's debt and other obligations, or $11.65 per share of Nexeo, subject to adjustments.
Univar President and CEO David Jukes said: "This transformational combination is designed to create the world's leading distributor of chemicals and ingredients, with excellent opportunities for our customers, suppliers, employees and investors. Together we will drive growth and shareholder value with North America's largest sales force in chemical and ingredient distribution, the broadest product offering and the industry's most efficient supply chain network. We expect the transaction to increase earnings and cash flow from the first year after closing and generate $100 million in annual run rate cost savings for the third year following closing and reduce annual capital expenditures by $15 million immediately."
Nexeo CEO David Bradley added: "We share Univar's confidence in the future of our combined company, given the strong strategic alignment in our business models, go-to-market strategies, superior product offerings and digital capabilities. This combination represents a logical and compelling step, consistent with our focus on accelerating growth for the benefit of our customers, employees and suppliers. We are especially pleased that Nexeo's employees are highly valued by Univar and that our shareholders can participate in the company's future success through continued stock ownership."
The transaction is expected to deliver $100 million, or approximately $0.43 per share (after tax), in annual execution cost savings for the third consecutive year, and immediately reduce ongoing annual capital expenditures by $15 million. Univar's Adjusted EPS is expected to increase from the first full year after closing. Univar expects the pro forma leverage ratio to be less than 3.0x at the end of the first full year after closing.
The transaction has been unanimously approved by the Boards of Directors of both companies, and is expected to be completed in the first half of 2019, subject to the approval of the shareholders of Univar and Nexeo, as well as the receipt of regulatory approvals and the satisfaction of other conditions. Nexeo's major shareholders, TPG and First Pacific, agreed to consent to the proposed transaction.
